In his recent Budget Speech, George Osborne had some good news for UK residents: the Income Tax Personal Allowance will rise to £10,000 on 6 April 2014, and to £10,500 on April 6 2015.
Most people who live and work in the UK are entitled to an Income Tax Personal Allowance, which is the amount of income you can receive each year without having to pay tax.
The amount of your Personal Allowance depends on your date of birth, as well as your total income for the tax year. This income amount includes everything you receive from all taxable sources, including pensions and interest on your savings.
During his Budget Speech last month, Chancellor George Osborne announced that the UK Personal Allowance will rise to £10,000 for the 2014/2015 tax year. From April 2015, it will rise again, to £10,500. This increase will result in the lowest paid workers paying less tax. According to Osborne, this is “£800 less in tax for every taxpayer since 2010, lifting three million of the lowest paid out of income tax altogether.”
A basic rate taxpayer will see a saving of about £112 in 2014-2015 and a further £100 in 2015-2016 on their annual income tax bill.
The 40% income tax threshold will also rise from £41,450 to £41,865 from 6 April 2014 and to £42,285 from April 2016.
If you need any tax-related advice or assistance, visit 1st Contact Accounting.